TREASURY

ECOFIN 21 February 2012

George Osborne: The Economic and Financial Affairs Council was held in Brussels on 21 February 2012. Ministers discussed the following items:
	Proposals from the Commission on Economic Governance
	Ministers agreed a general approach on the economic governance “two pack”. The legislation will allow the Commission increased oversight into the budgets of eurozone member states and also sets up a surveillance procedure for eurozone members subject to a macro-economic adjustment programme. The Government have been clear that the proposals should maintain a role for the Council where appropriate and the Eurogroup has agreed to inform the Council as a whole when a request for loan assistance has been made. The presidency will now commence the trialogue process with the European Parliament.
	Presentation and First Exchange of Views on Macro-economic Imbalances—Alert Mechanism Report
	The presidency introduced the Alert Mechanism Report as the first step in the new macro-economic imbalances procedure. The Commission clarified that the role of the report is to be a screening device to identify member states that might potentially be at risk of having, or developing imbalances. This item will be discussed in greater depth at the March meeting of the Economic and Financial Affairs Council.
	Contribution to the European Council Meeting on 1-2 March 2012: European Semester (including EuroPlus pact)
	Ministers agreed the conclusions on the European semester for the European Council. The presidency observed that these conclusions will end the first phase of the semester process and will provide important guidance to member states. The Government look forward to an in-depth discussion of structural reform and concrete commitments on growth at the European Council.
	Preparation of G20 Meeting of Finance  Ministers and Governors (Mexico,  25-26 February 2012)
	Ministers endorsed the EU terms of reference. The Commission spoke of the need to increase IMF resources, and the importance of making a case for this at the G20.
	Council Recommendation for the Discharge in Respect of the Implementation of the Budget for 2010
	The presidency introduced this agenda item by acknowledging that there was an increase in the error rate and that efforts to improve financial management
	needed to be stepped up. It reiterated the Council’s previous call for the error rate to reduce year on year. While the majority of Ministers agreed to a text recommending the discharge of the budget, the UK joined with Sweden and the Netherlands to vote against the recommendations. The UK voted against the discharge because of the slippage on progress made in recent years. Along with the Netherlands and Sweden, the UK issued a joint statement calling for tougher action in future years.
	Budget Guidelines for 2013
	The presidency introduced the proposed budget guidelines for 2013. During the discussion, the UK and others intervened to make clear that, in the current economic circumstances, there was a clear case for a constrained budget in 2013, as in 2012. Some other member states, while respecting the need for budget consolidation, argued that this should not compromise EU programmes. The Commission also argued that a larger EU budget could contribute to growth. The presidency noted the debate and concluded that the Council had adopted the presidency text for the 2013 budget guidelines.
	AOB
	The presidency debriefed the Council on the trialogue process on the European Markets Infrastructure Regulation (EMIR). They have reached an agreement with the European Parliament and the regulation should now be adopted by June and published before the European Parliament’s summer recess. The presidency also updated the Council on the review of deposit guarantee schemes. They had not made progress with the European Parliament and the presidency will come back at a later date with suggestions on how to proceed. I intervened to congratulate the presidency and the Commission on reaching agreement on EMIR and made clear that it was important that progress on the Deposit Guarantee Schemes Directive was made on the basis of the Council’s general approach.
	The French and German Ministers then presented their joint “Green Paper” on corporate tax convergence.
	Eurogroup debrief
	Ministers were debriefed over breakfast on the euro group meeting of 20 February where euro area Ministers had agreed a second programme of assistance and accompanying reforms for Greece. In the ensuing discussion there was recognition of the importance of supporting economic growth and the challenges that remain. I welcomed the outcome, but noted that this needed to be accompanied by a genuine and robust push for structural reform. On the wider economic situation the Commission previewed its interim growth forecasts (published on 23 February). Growth in the EU in the first half of 2012 was forecast to be subdued, with a modest return to growth in the second half. Ministers agreed to discuss the forthcoming election of a new president of the European Bank for Reconstruction and Development at March ECOFIN.
	European Investment Bank (EIB)
	Ministers were alerted to possible future EIB proposals for supporting growth in line with the January European Council statement.

COMMUNITIES AND LOCAL GOVERNMENT

Supporting England's Ports

Bob Neill: The coalition Government entered office with election pledges from both coalition parties to tackle the last Government’s “ports tax”—unfair backdated rates bills incurred by some businesses, including many situated in ports. The policy will also benefit businesses outside of ports, which meet the criteria.
	Until 2008, a number of businesses in each of the 55 statutory ports in England (approximately 700) and Wales, understood that they were not individually liable for businesses rates, as they believed that there was a combined bill that was paid by each port operator (their landlords) on behalf of all the firms within it.
	Following a review that was originally initiated in May 2006, the Valuation Office Agency decided that each firm was now a “separate occupation” and must each pay an individual business rate bill. The agency retrospectively backdated the rating list, which led to new tax bills for local firms to 2005, as required by legislation. As a result, firms including many based within ports across the country were hit with unexpected, massive bills, compounding the effect of the economic recession at the time.
	For many ratepayers, this was a totally unexpected tax change. In the case of companies operating in ports, the ports firms were contractually unable to renegotiate their contracts with the port operators to have a reduction in rent to compensate. No impact assessment was made, no consultation was undertaken and no assessment was ever made of the effect of these retrospective taxes on the wider economy.
	The combined effect of these tax changes had the potential to harm the wider economy, as a range of companies are based in ports, such as the car industry, reflecting the era of globalisation.
	The last Government amended regulations to allow the retrospective business rate bills to be paid off over eight years in instalments. However, firms were still required to pay the taxes, and under company law, they had to declare these liabilities in their accounts, which would have made some firms technically insolvent.
	The coalition Government announced in June 2010 that we would waive these backdated bills. Businesses told Ministers that the new taxes threatened jobs and investment.
	This waiver required primary legislation, which was introduced in the Localism Act 2011. Today I have laid regulations that implement the cancellation of certain backdated business rates liabilities.
	This coalition Government have taken real action to deliver on pre-election promises, and this send a clear signal of this Government’s determination to support economic growth and Britain’s export trade.
	The regulations come into force on 31 March 2012 and from that day, affected businesses in ports and across England, can at last claim back the relevant money they were required to pay and account for in the
	balance sheet. They can move forward with putting that money to its rightful use—to build up their businesses, retain jobs and benefit from international trade.
	In Wales, this is a matter for the Welsh Assembly Government. It is disappointing that they have not chosen to support Welsh firms, despite the allocation of full consequential funding under the Barnett formula. That decision puts firms in Welsh ports at a competitive disadvantage to England.
	The table below details how firms in each port in England will financially benefit from this tax cut.
	
		
			 Estimated Value of Waiver of Backdated Liability by Individual Port 
			 Port Number of Businesses Estimated Backdated Liability after Reliefs (£ Thousand) 
			    
			 Barrow 1 3 
			 Blyth 13 62 
			 Boston 10 345 
			 Bristol 7 1,156 
			 Dover 55 714 
			 Falmouth 5 314 
			 Felixstowe 8 310 
			 Fleetwood 2 13 
			 Folkestone 4 82 
			 Garston 7 334 
			 Goole 59 3,710 
			 Great Yarmouth 2 71 
			 Grimsby 17 2,431 
			 Harwich Dock 2 5 
			 Harwich International 4 703 
			 Heysham 11 828 
			 Hull 62 9,543 
			 Humber Sea Terminal 3 4,793 
			 Immingham 44 8,724 
			 Ipswich 10 942 
			 King’s Lynn 10 274 
			 Liverpool 92 11,521 
			 Lowestoft 7 112 
			 Manchester Ship Canal 8 473 
			 Plymouth Millbay 10 383 
			 Poole 30 317 
			 Portsmouth 10 247 
			 Ramsgate 12 113 
			 Seaham 7 11 
			 Sharpness 5 149 
			 Sheerness 59 6,608 
			 Shoreham 4 86 
			 Southampton 32 2,862 
			 Sunderland 18 111 
			 Teesport 21 1,051 
			 Teignmouth 1 165 
			 Thamesport 13 268 
			 Tilbury 40 5,964 
			 Tilbury Container Services 3 44 
			 Tyne 19 541 
			 Total 727 66,381 
		
	
	Source: local VOA office records on ports
	These figures are based upon VOA data as at 30 April 2010. The number of properties and rates cancelled may reduce by:
	Appeals that have been subsequently determined;
	The actual levels of relief granted are greater than the general assumption;
	Companies who have gone bust will not receive a refund;
	These figures are maximum limits because the data account for only one of the eligibility criteria (backdated liability of more than 33 months).

FOREIGN AND COMMONWEALTH AFFAIRS

Foreign Affairs and General Affairs Council (February 2012)

David Lidington: The Foreign Affairs Council (FAC) and General Affairs Council (GAC) were held in Brussels on 27 and 28 February respectively. My right hon. Friend the Foreign Secretary attended the FAC. I attended the GAC.
	Foreign Affairs Council
	The FAC was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Baroness Ashton of Upholland. A provisional report of the meeting and all conclusions adopted can be found at:
	http://www.consilium.europa.eu/uedocs/coms_data/docs/pressdata/EN/foraff/128226.pdf.
	The agenda items covered were as follows:
	Syria
	Ministers agreed conclusions (see link above) which confirmed a Council decision on additions to the EU’s sanctions against the Assad regime including freezing the assets of the Central Bank of Syria; a ban on importing gold and precious metals; a ban on cargo flights; and the listing of an additional seven Government Ministers.
	The conclusions also condemned the recent bombardment of Homs, including the killing of several journalists; humanitarian issues; support to the Friends of Syria; support to the opposition; support to the Arab League and for work in the UN; and setting out the EU offer to support a post-Assad transition.
	Following the meeting the Foreign Secretary said:
	“I welcome today’s EU agreement to freeze the assets of the Central Bank of' Syria and restrict the Syrian regime’s access to the gold and precious metals market. Along with previous rounds of sanctions, these tough measures are tightening the economic pressure on President Assad. The EU has also imposed sanctions on an additional seven individuals for their involvement in the repression of civilians and suspended cargo flights operated by Syrian airlines.
	“This 12th round of EU sanctions reinforces the clear message from the meeting of Friends of the Syrian people on 24 February, which condemned the regime’s ongoing use of widespread and indiscriminate violence against peaceful protestors and agreed to continue working closely lo resolve the situation in Syria.
	“That is why we are doing all we can to bring the widest possible weight to bear on the Syrian regime and increase the stranglehold on it.
	“We will continue working closely with our EU partners to support the Arab League and its plan lo end the violence in Syria and bring about a Syrian-led transition to a peaceful and more open political system”.
	Egypt
	On Egypt, Ministers had a brief discussion and agreed conclusions (see link above) urging continued progress on the transition to civilian rule, and registering concern about recent moves against non-Government organisations.
	Serbia/Kosovo
	Ministers discussed the political dimension of Serbia’s EU application ahead of the formal discussion at the General Affairs Council (see below). The Foreign Secretary welcomed the progress made in the Belgrade/Pristina dialogue. He also expressed support for the European Commission’s intention to launch a stabilisation and association agreement (SAA) feasibility study for Kosovo.
	Belarus
	Ministers discussed a potential sanctions package to target those responsible for ongoing human rights violations as well as those who are supporting or benefiting from the Belarusian regime. Ministers agreed to put a package of sanctions before the General Affairs Council for agreement the following day (see below) and commissioned a further list of targets to be considered at the FAC on 23 March.
	South Caucasus
	Ministers agreed wide-ranging conclusions (see link above) covering the EU’s relationship with Armenia, Azerbaijan and Georgia.
	Middle East Peace Process
	Ministers exchanged views on the latest events in the middle east, in particular the “Doha Declaration” on Palestinian reconciliation. Ministers agreed the EU should continue with its engagement.
	Somalia
	The UK Permanent Representative, Sir Jon Cunliffe, briefed on the outcomes of the London conference on Somalia.
	Other business
	Conclusions were also agreed on Yemen, welcoming President Hadi’s inauguration and pledging EU support for transition; and on the Union for the Mediterranean, transferring the European chairmanship from France to the EU. Baroness Ashton briefed on her recent visit to Brazil and Mexico, including for the G20 Foreign Ministers.
	General Affairs Council
	Serbia
	The December European Council mandated the GAC to make a decision on Serbia’s candidate status. I expressed support for granting candidate status given the progress Serbia had made in meeting the conditions to improve relations with Kosovo as set by the December European Council. These were to (i) implement agreements already reached in the dialogue with Kosovo, including border management (ii) reach an agreement with Kosovo to allow their participation in regional forums, and (iii) to co-operate with the EU rule of law mission (EULEX) and NATO peace-keeping force (KFOR) in Kosovo. Ministers were agreed that Serbia had met these conditions and recommended candidate status. They looked forward to this being confirmed at the March European Council.
	Ministers also noted the European Commission’s intention to launch a feasibility study for a stabilisation and association agreement (SAA) with Kosovo.
	The conclusions on enlargement for the GAC can be seen at the link below.
	http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/genaff/128255.pdf.
	March European Council
	The conclusions for the March European Council were discussed over lunch with Herman Van Rompuy, the president of the European Council. Herman Van Rompuy announced that a discussion of the candidates for the positions of president of the European Council and president of the eurozone was planned for the margins of the March European Council. This discussion would be chaired by the Danish presidency as Mr Van Rompuy himself was standing for re-election as president of the European Council and for election as president of the eurozone. Mr Van Rompuy also informed the Council that an issues paper would be issued on the “European Semester” which assessed the performance of member states under recommendations made in the 2011 annual growth survey.
	The UK specific recommendations focused on addressing the fiscal deficit, housing benefit reform, encouraging financing—particularly for small and medium-sized enterprises and measures to tackle unemployment. The March European Council will also make new recommendations for 2012.
	I referred to the Letter on Growth of 20 February written by the Prime Minister and 11 other Heads of State or Government and called for this letter to inform heavily, the conclusions of the March European Council. Restoring growth should be the EU’s top priority and the measures discussed in the letter, such as agreeing to free trade agreements and reducing the burden of regulations from the EU were essential to delivering this growth and ensuring Europe’s future competitiveness.
	Ministers agreed that Serbia would also feature at the March European Council following the upward referral of this issue by the GAC.
	Belarus
	Following on from the discussion at the FAC (see above), Ministers approved strengthened measures against those responsible for the crackdown on civil society and the opposition in Belarus, adding 21 names to the list of people targeted by a travel ban and asset-freeze. This decision caused Belarus to recall its ambassadors to Poland and the EU, and invite the Polish ambassador to Belarus and the Head of the EU delegation to return to their capitals for consultations. At Baroness Ashton’s suggestion, all EU member states agreed to recall their ambassadors from Belarus for consultations. The Foreign Secretary issued the following statement on 29 February:
	“I am deeply disappointed at the decision of the Belarusian authorities to recall their ambassadors to the EU and Poland and to seek the recall of the EU and Polish ambassadors to Minsk. This is their response to the imposition of further EU sanctions on 28 February.
	The UK, together with its EU partners, has consistently made clear to Belarus that the EU would continue to impose further sanctions as long as political prisoners remained in place and the repression of civil society continued. I regret that there have been no positive developments in this respect and that, instead, the repression has continued unabated and further political prisoners have been detained.
	We remain committed to supporting the people of Belarus and willing to re-engage fully with Belarus once the conditions are right.
	In the light of this most recent development, the UK has decided, in solidarity with all other EU member states, to recall for consultations its ambassador to Minsk and to summon the Belarusian ambassador to the UK to the Foreign Office”.
	I will continue to update Parliament on future Foreign and General Affairs Councils.

HOME DEPARTMENT

Sexual Offences Act 2003 (Amendments)

James Brokenshire: UKSC 17. In this case, the Supreme Court made a declaration of incompatibility under section 4 of the Human Rights Act 1998 in relation to the notification requirements for an indefinite period under section 82(1) of the Sexual Offences Act 2003. The Government’s response [Cm 8293] to the Joint Committee on Human Rights’ (JCHR) report: Nineteenth Report of Session 2010—12 HC 1549 Proposal for the Sexual Offences Act 2003 (Remedial) Order 2011, published in October 2011, has today been laid before the House.
	Protecting the public is a priority and to this end, the Home Office continues to engage with public protection agencies to ensure that the risk posed to the public by sexual offenders is managed effectively. New measures will make it compulsory for all offenders subject to the notification requirements under the Sexual Offences Act 2003 to: notify the police of all foreign travel (including travel outside of the UK of less than three days); notify weekly where they are not registered as regularly residing or staying at one place (i.e. where a registered sex offender has no sole or main residence and instead must notify the police of the place where he can regularly be found); notify where they are living in a household with a child under the age of 18; notify bank account and credit card details and notify information about their passports or other identity documents at each notification, tightening the rules so that sex offenders can no longer seek to avoid being on the register when they change their name. A summary of the responses received to the Home Office consultation on these changes is available on the Home Office website and will be placed in the House Library.
	The Sexual Offences Act 2003 (Remedial) Order 2012 will give offenders the ability to seek a review of their indefinite notification requirements only once they have completed a fixed period of time subject to those requirements (typically 15 years from the time of first notification following release from custody for adults, and eight years for juveniles). The review will be carried out by the police and will take into account a range of
	factors, including any information provided from agencies which operate within the multi-agency public protection arrangements framework. This will ensure that there is an individual assessment of risk before any offender is considered for removal from the notification requirements. A route of appeal to a magistrates court has also been included. We are clear that we have developed a process that is robust, workable and makes public protection a central factor, while at the same time preventing sex offenders being able to waste taxpayers’ money by repeatedly challenging our laws. Sex offenders who continue to pose a risk will remain on the register and will do so for life if necessary.
	The final impact assessments for these proposals can also be found on the Home Office website.

Domestic Violence

Theresa May: Domestic violence is a dreadful form of abuse. The fact that two people are killed by their current or former partner each week in England and Wales shows just how urgent is the need for action. The Government are committed to ensuring that the police and other agencies have the tools necessary to tackle domestic violence to bring offenders to justice and ensure victims have the support they need to rebuild their lives.
	Today, I am announcing that a one-year pilot will take place from the summer of 2012 to test out a domestic violence disclosure scheme in the police force areas of Greater Manchester, Gwent, Nottinghamshire and Wiltshire. The pilot will test a process for enabling the police to disclose to the public information about previous violent offending by a new or existing partner where this may help protect them from further violent offending. The pilot will test two types of process for disclosing this information. The first would be triggered by a request by a member of the public (“right to ask”). The second would be triggered by the police where they make a proactive decision to disclose the information in order to protect a potential victim (“right to know”). Both processes can be implemented within existing legal powers.
	The pilot follows the consultation I published in October 2011 where I sought views on whether the protection available to victims of domestic violence could be enhanced by establishing a national disclosure scheme with recognised and consistent processes for the police to disclose information to potential victims. While a clear majority of respondents favoured the introduction of a national disclosure scheme, the consultation raised important issues on the scope and proportionality of the information that should be disclosed to potential victims and the safeguards that will be needed against malicious applications. I believe that it is right that these issues are addressed and tested in a pilot to ensure that the disclosure scheme is compatible with all relevant law.
	We will consider the outcomes from the pilot very carefully. I want to ensure that the public have confidence that a clear framework exists with recognised and consistent processes for disclosing information that supports their needs.
	A copy of the summary of responses to the consultation will be placed in the Library of the House.

JUSTICE

Emergency Workers (Obstruction Act 2006 Post-Legislative Scrutiny

Kenneth Clarke: I am today laying before the House the Government’s memorandum to the Justice Committee on post-legislative scrutiny of the Emergency Workers (Obstruction) Act 2006.
	The Emergency Workers (Obstruction) Act 2006 introduced offences of obstructing or hindering an emergency worker responding to emergency circumstances, and obstructing or hindering a person assisting such a worker. Those emergency workers covered by the Act include fire and rescue workers, ambulance personnel and those transporting organs, coastguards and lifeboatmen.
	These reforms have been implemented, in line with the stated objectives of the Act, as detailed in the memorandum.